Freeland warns ‘we could spend even more’
Finance Minister Chrystia Freeland estimated a $35 billion deficit for the 2024/25 fiscal year. That has twice changed, with Cabinet’s April 16 budget ($39.8 billion) and an October 17 Budget Office report ($46.4 billion).
Finance Minister Chrystia Freeland warned her government could spend more money without bankrupting taxpayers, reporters learned. That counters further advice from the Budget Office against further spending.
“We could be spending even more and public finances would still be sustainable,” claimed Freeland, clarifying she is not advocating that. “I am simply saying the Budget Office report was very, very clear.”
Contrary to her remarks, the federal deficit has twice changed for the 2024/25 fiscal year, reported Blacklock’s Reporter. Once with Cabinet’s April 16 budget ($39.8 billion) and again ($46.4 billion) with the October 17 Budget Office report Economic And Fiscal Outlook October 2024. “This increase is largely due to new spending,” wrote analysts.
“How do you account for that changed?” asked a reporter. “That is just a Budget Office report,” replied Freeland. “It’s not the final numbers.”
Meanwhile, the same report forecast debt servicing charges at $52.8 billion this fiscal year, and $60 billion by 2027. That surpasses what Parliament spends annually on Medicare or national defence.
“These interest payments represent taxpayer dollars that don’t go towards any programs or services for Canadians, and have grown to impose a significant burden on federal finances,” writes Grady Munro and Jake Fuss, economists with the Fraser Institute.
One Institute study, Pandemic Outlook And Recovery, identified the cost of living as a primary concern for Canadians. Of 2,000 respondents surveyed, 36% acknowledged they may be worse off financially than their parents.
The economists blamed the Trudeau government for placing a “significant burden” on future generations. Canadians aged 16 will pay an estimated $29,663 over their lifetime in additional personal income taxes as a consequence of rising federal debt.
Minister Freeland in 2023 testimony rejected claims that federal spending was out of control, amid rising debt service charges. “Our debt service charges are absolutely handleable,” she said at the time.
The Department of Finance earlier claimed it had no choice in raising the debt ceiling from $1.83 trillion to $2.13 trillion in amendments tabled to the Borrowing Authority Act. That marks a trillion dollar increase over the previous three years.
Minister Freeland in a 2020 speech at the Toronto Global Forum said cabinet would have to cut spending at some point but did not clarify a spending limit. “There are no free lunches,” she said at the time. “Our fiscally expansive approach to fighting the coronavirus cannot and will not be infinite.”
The federal government has not balanced the budget since 2007.
Alex Dhaliwal
Calgary Based Journalist
Alex Dhaliwal is a Political Science graduate from the University of Calgary. He has actively written on relevant Canadian issues with several prominent interviews under his belt.